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Reinventing Human Resource Management

HRM13: Form Labor- Management Partnerships for Success

Background

The federal service labor-management relations statute, Title VII of the Civil Service Reform Act (CSRA) of 1978, provided the authority for employees to unionize, bargain collectively, and participate with agency management in making decisions that affect their working conditions. Prior to enactment of the statute, the federal labor management relations program was authorized by a series of Executive Orders. The statute was a blend of policies and approaches from Executive Order and the law governing labor-management relations in the private sector, the National Labor Relations Act.

Title VII of CSRA recognizes that "labor organizations and collective bargaining in the public service are in the public interest"; establishes the Federal Labor Relations Authority to administer the program, issue policy decisions, and adjudicate labor-management disputes; prohibits strikes and lockouts; prohibits agency shop or fair share representational fees; and prohibits bargaining on issues that are the focus of most private sector bargaining such as wages, fringe benefits, and issues related to hiring, firing, promoting and retaining employees.

The General Accounting Office (GAO) summarizes the differences between the federal labor-management relations program and the labor- management relations program in the nonfederal sector as follows:

Bread and butter issues, such as wages, fringe benefits, and any of many other issues relating to hiring, firing, promoting, and retaining employees, which are the focus of private sector bargaining, generally cannot be negotiated in federal contracts. . . . [F]ederal sector bargaining has been generally limited to the way personnel policies, practices, and procedures are implemented. Traditional bargaining incentives, i.e., strikes and lockouts, are prohibited. Agency shop or fair share representation fees, are prohibited. Under the federal program, employees are entitled to select a union to represent them, but they cannot be compelled to join or pay a fee for the representation that the union is required to provide.(1)

Currently, about 60 percent of the federal workforce--1.3 million employees--are represented by federal unions; 80 percent of the employees who are eligible for union participation are represented by an employee union. They are represented by approximately 125 labor organizations in approximately 2,200 bargaining units. The three largest federal employee unions are the American Federation of Government Employees, which represents more than 600,000 employees; the National Treasury Employees Union (NTEU), which represents more than 150,000 employees; and the National Federation of Federal Employees, which represents approximately 150,000 employees.(2)

Need for Change

The federal workforce is changing. While the number of employees has remained constant for the past 10 years, the workforce has changed in a variety of other ways: it is much more diverse, with more minorities and women; it is better educated; it is more mobile; and more employees work in professional, scientific, and highly technical jobs than ever before.

Consistent with national trends, federal employees want to participate in decisions that affect their work. Employee involvement is accomplished through a variety of means including employee unions, quality circles, quality of work life initiatives, self-managed work teams, and perhaps most significantly in recent years, Total Quality Management (TQM). The rapid expansion of TQM in the federal government has dramatically increased the opportunities for employee involvement. GAO reported that 68 percent of federal installations are working on various phases of TQM, with involvement of about 13 percent of their employees.(3) TQM experts point out that union- management cooperation is a prerequisite for a successful TQM program. GAO reported that 59 percent of the installations surveyed reported that employee unions were involved in TQM implementation. The National Academy of Public Administration (NAPA) cites as an example of labor-management cooperation the Internal Revenue Service (IRS)-NTEU Joint Quality Improvement Process, which was started in 1987, and which has spread throughout IRS, resulting in cost savings as well as improved labor-management relations. NAPA recommends that this success be replicated.(4)

In a report issued in 1991, GAO concluded that piecemeal technical revisions to the federal labor-management relations program would not be appropriate and comprehensive reform was needed. The report noted that "the federal labor-management relations program is not working well . . . (1) the program is too adversarial and often bogged down by litigation over procedural matters and minutiae; (2) some dispute resolution mechanisms are too lengthy, slow, and complex; and (3) ineffective FLRA management has weakened the program."(5) These conclusions have been widely supported, for example, by NAPA in its 1993 report on federal human resource management.

The following example of traditional bargaining illustrates the current state of affairs:

. . . traditional negotiation techniques were used to address all term and mid-term collective bargaining matters. Union and management developed positions on issues, submitted inflated proposals to each other, argued vigorously, and concealed the degree of importance they attached to each proposal in order to demand a significant concession by the other party to drop any proposal, however inflated or unimportant. The eventual outcome or agreement was determined through a series of power plays using a number of different tactics. For example, sometimes the union or management walked out of the negotiations. Discussions focused on personalities and anecdotal data rather than the issues. On occasion, the union picketed to draw attention to its concerns. Information was withheld by both parties. Sometimes management ended the dialogue by merely declaring issues to be nonnegotiable. The net result of these tactics was a labor- management relationship built on acrimony, distrust, confrontation, and litigation. Few efforts were made to resolve problems informally. Once negotiations were concluded, problems arising during the administration of negotiated agreements were usually addressed through grievance procedures or unfair labor practice charges.(6)

In developing its report, GAO solicited the views of union officials, management officials, and neutral experts at the national level, as well as union officials and managers at the local level. To summarize the views of these participants in the federal labor-management relations program:

--- Federal collective bargaining has not accomplished the objectives of the statute. Bargaining processes are too legalistic and adversarial and too often lead to litigation over procedural matters and minor disputes.

--- Some dispute resolution processes are too slow, lengthy, and complex.

--- Over two-thirds of the national level officials and experts supported an agency shop approach whereby employees would be required to pay fees to the unions that represent them even if they do not belong to the union. Local-level union officials strongly supported agency shop, while two-thirds of local-level managers surveyed did not.

--- The greatest divergence of opinion was over the scope of bargaining--the extent to which working conditions could be negotiated by union and management. Over half of the agency officials opposed any change, while all union officials and 80 percent of neutrals supported increased bargaining rights. At the local level, 96 percent of union officials wanted a broader scope of bargaining, as did 21 percent of managers.

--- Most union officials, national and local, and neutral experts agreed that labor-management relations is a low priority for federal agencies; management officials disagreed.

--- Agency officials and neutral experts believe that unions file too many unfair labor practice charges over minor issues, while union officials claim that the problem is FLRA's failure to take actions to deter violations by agency officials.

--- Everyone agreed that more attention must be given to cooperative labor-management relations.

FLRA, the Federal Mediation and Conciliation Service (FMCS), and a few individual agencies have been encouraging and facilitating labor- management cooperation and partnerships in federal labor relations. However, their efforts have been hampered by a statutory framework that focuses on the traditional adversarial model.

Given bargaining processes that are too legalistic and adversarial, and dispute resolution processes that are slow, lengthy, and complex, virtually all participants consider the federal labor relations programs to be very costly and ineffective. A comment by one of the experts interviewed by GAO succinctly illustrates the prevailing view: "We have never had so many people and agencies spend so much time, blood, sweat, and tears on so little. In other words, I am saying I think it is an awful waste of time and money on very little results."(7)

While there is agreement that the program is not cost-effective, it is difficult to determine the exact cost. Several agencies that were asked for information about the cost of their labor-management relations program responded that cost data were not available and that lengthy, costly studies would be required to determine them. In 1982, GAO conducted its only study of federal-labor management relations costs, estimating the cost to the government of processing the 6,448 unfair labor practices (ULPs) filed in that year to be $25.9 million.(8) The cost of processing the 8,851 ULPs filed in 1992 must be significantly greater than $25.9 million.

GAO cited the need for a new labor-management relations framework that "motivates labor and management to form productive relationships to improve the public service; makes collective bargaining meaningful; improves the dispute resolution processes; and is compatible with innovative human resource management practices that emphasize employee involvement, team building, and labor-management cooperation."(9)

NAPA supported the GAO recommendation for comprehensive reform, concluding, "The labor-management relationship is critical for the employee involvement so vital to organizational change. Without the improved participation and communication that comes with greater employee involvement, efforts at empowerment and commitment will flounder. Adversarial bargaining on win-lose issues will coexist with cooperative win-win bargaining. But cooperation will create more forums for joint problem solving and planning that improve results for both labor and management, and ultimately the employee and the organization."(10)

The changes envisioned by the National Performance Review (NPR) will result in a government composed of high-performing organizations that are mission-driven and results-oriented with a clear focus on meeting the needs of customers. Hierarchy will give way to participation and teamwork. Employees will be highly skilled and motivated, empowered to make changes and continuously improve the quality of services provided. The transformation from the current to the desired state of government can only be achieved by transforming the labor-management relationship from an adversarial relationship to a partnership for reinvention and change.

One of the first steps in reform of any system is development of a vision of the future that key stakeholders are committed to achieve. A vision for federal labor-management relations describes the desired federal government workplace of the future and, within that workplace, the labor-management relations program that is one of its essential elements. A group of union officials, managers, and neutral labor-management experts met with NPR staff to develop the following vision of labor-management relations in the year 2000.(11)

Vision of Cooperative Labor Management Relations in the Federal Government

In the future, the federal workforce should be valued as a full partner in decisionmaking. There should be equal access to information among management, employees, and unions. As a result, employees will be involved in decisions that affect them. Where employees are represented by an employee union, labor and management should be partners in carrying out the mission of the organization. Both labor and management should value diversity. There should be a shared sense of mission and values throughout the organization that is understood by everyone.

Federal organizations should be model employers providing the private sector with exemplary models of high-performing organizations. They should place authority and decisionmaking at the lowest appropriate level of the organization--the work unit. Issues should be resolved through a single, collaborative process that is not destructive to the partnership. Given the effectiveness of federal organizations, public service should be viewed as a desirable career by both current and potential employees.

There should be a partnership between union and management that enables government organizations to become high-performing organizations. This, in turn, should result in high-value, high- quality, effective government. The purpose of the partnership should be to provide an open forum for the discussion and resolution of problems, both procedural and substantive, dealing with conditions of employment that significantly affect the operation of the organization. Problem resolution should be accomplished through a deliberate, consensual team approach that is shaped by the input of all concerned partners rather than through traditional negotiating postures. The goal is to create an effective labor-management relationship based upon partnership and trust that utilizes the strengths of both parties to meet and mutually resolve issues in a way that enhances the effectiveness of both labor and management.

Employees, management officials, and union leaders should be continuously trained in support of the labor-management relationship, which in turn should lead to creation of high-value, high-performing government organizations. Training should be provided in the areas of facilitation, problem-solving, negotiation, leadership, and quality.

Performance should be continuously improved on an organizational and individual level throughout the entire government; unnecessary conflict should be avoided; unavoidable conflict should be recognized and channeled to closure quickly, without animus; and individual and institutional (i.e., labor-management) cooperation should be encouraged and rewarded. The appeals process should be fair, simple, determinative, fast, and inexpensive. There should be incentives for labor-management cooperation and strong disincentives for labor or management to violate the partnership or to fail to settle or resolve issues within the partnership.

Union effectiveness is one of the cornerstones of the productive workplace partnership. Union effectiveness requires a strong, professional, financially secure union that represents the interests of all employees.

Unions and management should work together as partners to transform the way organizations are structured, work is performed, and services are delivered. Management and unions should design systems and solutions to issues involving efficiency, productivity, quality, and how the job gets done. Placement of authority and decisionmaking in the work unit should be aided by the absence of artificial barriers to bargaining at any level.

Action

The President should issue an Executive Order that identifies labor- management partnership as a goal of the executive branch and establishes the National Partnership Council. (2)

When many people think of labor-management relations, they visualize an adversarial relationship. Depending on their viewpoint or experience, they may see management assuming a posture to protect its authority and do all it can to ensure efficiency at the cost of reduced benefits and wage cuts. Others may see unions as wanting work rules that prevent organizations or work groups from being more effective, and insisting on bargaining or grieving over the most mundane and inconsequential issues.

Depending on their perspective, some people may see ideas such as labor-management partnership and cooperation simply as code words for allowing managers to bypass unions to get employees to work harder, faster, and less wisely, with fewer protections. Others may see cooperative initiatives simply as opportunities for unions to bargain over pay, organization mission, and goals, and receive more concessions in work and seniority rules, benefits, and protections for ineffective workers.

The Executive Order would dispel these images. It would make it clear that the goal is an entirely new concept of labor-management relations. The Executive Order should contain two parts and be accompanied by a presidential statement, as outlined below.

Executive Order, Part 1: Concepts.

--- The goal of any labor-management partnership is the creation of a high-performance organization to deliver quality services to the American people in a way that integrates employee and other stakeholder interests.

--- Partners work for each other, not against each other. They respect each other's contributions and have a sense of ownership of, and share in decisions that affect, the organization's products and services.

--- Partners work in team environments that value contributions based on knowledge and experience, and blend these contributions to enhance quality, creativity, flexibility, and responsiveness.

--- Management's role shifts from an emphasis on protecting its authority to promoting empowerment at the lowest practical levels to provide for employee and union participation.

--- The union's role shifts from a reactive posture to proactive employee representation in support of agency mission accomplishment and workplace effectiveness.

--- When we speak of employees and partnerships, and when employees have collectively decided to elect representatives to speak on their behalf, then the unions and employees must be treated as full partners.

--- Changing the culture of the federal government requires overcoming resistance from employees and managers alike. Each naturally will believe that the change may bring certain losses of what they value. Developing a partnership in any change effort provides the institutional help to support movement to the federal workforce and organization of the future.

Executive Order, Part 2: Methods. Following are some methods that should be put into place through the Executive Order to support goal attainment. The National Partnership Council may suggest other methods.

--- Create the National Partnership Council to champion the partnership goal.

--- Encourage the formation of similar councils or labor-management committees at appropriate levels in each agency, or adapt existing bodies to meet this purpose, and identify and/or train facilitators for these labor-management committees as needed.

--- Encourage systematic training of significant portions of agency staffs (including line managers and first line supervisors) and union officials (including stewards) in alternative dispute resolution (ADR) techniques, interest-based bargaining approaches, and joint problem-solving/decisionmaking methods.

The National Partnership Council. The Executive Order should provide the charter for the National Partnership Council and encourage similar partnership arrangements at a variety of levels in each agency. By October 1993, the President should announce the appointments to the council and the date it should begin its work. He should explain that achieving the partnership goal throughout the executive branch requires a knowledgeable and experienced group to champion such a change. Such change will be incremental and build on actual models and successful experiences. The council should serve as such a group and help steer the executive branch toward the partnership goal. In describing the council, the Executive Order should contain the following elements:

--- Permanent members:

- Deputy Secretary, Department of Labor

- Deputy Director for Management, Office of Management and Budget (OMB)

- Director, OPM

- Chairperson, FLRA

- Director, FMCS

- Presidents of the three largest federal unions

- Representative, Public Employee Department, AFL-CIO (to represent smaller federal unions).

--- Rotating members (1-year appointments, may be extended):

- Two deputy secretaries from departments other than Labor.

--- Responsibilities and authority:

- champion the creation and support of partnerships in the executive branch; collect and disseminate information about, and provide guidance on, partnership efforts, including results achieved;

- bring together expertise both within and outside the federal government to learn about and foster partnership arrangements;

- participate in the development of legislation related to the partnership goal, to include the creation of a flexible and responsive hiring system and the reform of the General Schedule classification system; and

- engage in other activities that promote partnership efforts not prohibited by statute.

--- Staff support and funding:

- OPM, FMCS, FLRA, OMB, agencies, and unions will make staff available on a temporary or permanent basis to the council, as needed. The council will decide on the procedures for acquiring and using staff support.

- The council may form permanent or temporary committees that will be responsible for specific issues or projects.

--- Council's objective: the Executive Order should charge the council with proposing to the President statutory changes needed to help make the partnership goal a reality. The council should be responsible for deciding on the process for developing the proposals. The process should:

- model the partnership concepts and decisionmaking techniques the council is championing;

- involve stakeholders both within and outside the executive branch;

- build on the work already done by the NPR multi- stakeholder problem-solving team; and

- produce a strategy to build the political consensus necessary to enact major changes in the statutory framework.

Agency Partnership Committees and Councils. The Executive Order should encourage each agency to foster partnerships with employee unions. This may involve creating, at various levels, processes and groups to foster partnerships, or adapting existing structures and processes to meet this need. Each agency should be responsible for the form this takes. However, agencies should be asked to ensure that their processes and groups

--- foster partnerships that move the organization toward high performance and support the agencies' quality improvement and culture change efforts as well the agencies' goals and missions,

--- support the efforts of the National Partnership Council,

--- share the results of agency partnership efforts,

--- take the lead in ensuring that agency staff gain skills and knowledge in joint problem solving, group facilitation, interest- based bargaining, and alternative dispute resolution techniques, and

--- evaluate progress focusing specifically on improvements in organizational performance resulting from the partnership.

Presidential Statement. The presidential statement will accompany and provide the rationale for the Executive Order and make the case for the partnership by articulating the following:

--- The partnership goal means that agency mission achievement will be jointly and continually pursued through "innovative approaches that maximize the contributions of individual employees, managers and the Union" working together to achieve these objectives, as outlined, for example, in the 1992 IRS-NTEU partnership agreement.

--- Collective bargaining will take place less in an adversarial setting with parties bringing their positions to the table, but increasingly through interest-based bargaining that insists upon consensus decisionmaking and trust within the partnership.

--- Although grievances, complaints, and disputes are to be expected, it is envisioned that less than 10 percent of those conflicts will be settled outside the partnership. This means that formal complaint and grievance processing procedures will be used infrequently with informal dispute resolution techniques providing a foundation for the partnership.

--- There is a place for disagreements, adversarial behavior, and different approaches to problems; however, these will occur prior to decisions being made because airing different viewpoints and then achieving joint decisions are the essence of partnerships.

--- Requirements fixed in law will not be subject to negotiation; however, management and unions are obligated to use interest-based forms of negotiation on issues, both procedural and substantive, dealing with conditions of employment that significantly affect the operation of the organization.

Cross References to Other NPR Accompanying Reports

Department of Labor, DOL03: Expand Negotiated Rulemaking and Improve Up-front Teamwork on Regulations.

Reinventing Federal Procurement, PROC05: Reform Labor Laws and Transform the Labor Department into an Efficient Partner for Meeting Public Policy Goals.

Endnotes

1. U.S. General Accounting Office (GAO), Federal Labor Relations: A Program in Need of Reform, GAO/GGD-91-101 (Washington, D.C.: U.S. General Accounting Office [GAO], July 1991), p. 14.

2. U.S. Office of Personnel Management, Union Recognition and Agreements in the Federal Government (Washington, D.C., January 1991), pp. 6-7.

3. U.S. General Accounting Office, Quality Management: Survey of Federal Organizations, GAO/GGD-93-9BR (Washington, D.C.: GAO, October 1992), p. 2.

4. National Academy of Public Administration (NAPA), Leading People in Change: Empowerment, Commitment, Accountability (Washington, D.C., April 1993), p. 40.

5. GAO, Federal Labor Relations, p. 2.

6. Goodwin, Larry K. "Win-Win Negotiations: A Model for Cooperative Labor Relations," The Public Manager (Potomac, MD, Summer 1993), p. 19.

7. GAO, Federal Labor Relations, p. 76.

8. U.S. General Accounting Office, Steps Can Be Taken to Improve Federal Labor-Management Relations and Reduce the Number and Costs of Unfair Labor Practice Charges, GAO/FPCD-83-5 (Washington, D.C.: GAO, November 5, 1982), p. 7.

9. GAO, Federal Labor Relations, p. 76.

10. NAPA, pp. 40-41.

11. A problem-solving team was formed under NPR auspices to develop a vision for the future of the federal workforce and federal-labor management relations, and make recommendations to achieve the desired future--more cooperative labor-management relations. Members of the problem solving team included: Joe Coffee, National Performance Review (NPR); Brian DeWyngaert, Executive Assistant to the President, American Federation of Government Employees (AFGE); Frank Ferris, Director of Negotiations, National Treasury Employees Union (NTEU); Brian Flores, Deputy Director, Federal Mediation and Conciliation Service; Phil Kete, Staff Attorney, National Federation of Federal Employees (NFFE); Frank Mason, Associate Director, Commodities Directorate, McClellan Air Force Base; Jean McKee, Chair, Federal Labor Relations Authority; Jerry Ross, arbitrator; Mark Roth, General Counsel, AFGE; John Sturdivant, President, AFGE; Jeff Sumberg, Deputy General Counsel, NFFE; Robert Tobias, President, NTEU; Roy Tucker, NPR; Robert Wenzel, Assistant Commissioner, Internal Revenue Service; and Ann Wilson, Office of Personnel Management. Bonnie Kasten, Independent Consultant, served as facilitator.

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